Report of the Local Government Efficiency Review Group

4.2.6 Aside from keeping costs down, local authorities can also respond in a
proactive way to promoting economic recovery in their area. The National
Competitiveness Council has suggested that cities in particular can play a
key role in driving economic development not just for their areas but their
regional hinterlands. Certain issues that affect competitiveness are outside
of the direct control of local authorities, such as national taxes, education,
labour costs, and currency fluctuations. However, local authorities are key
actors in ensuring the availability of zoned and serviced land, investing in
physical infrastructure and broadband, and making their areas attractive to
talented and highly skilled workers and to economic investment.
4.2.7 The Group noted that county and city councils are responding to the
economic downturn through increasing their role in supporting economic
activity and through pursuing initiatives with other agencies through the
County/ City Development Boards (CDBs). A multi-agency group dedicated
to economic development has been set up under the auspices of the CDB in
each county / city area to support the co-ordination of economic
development and promotion in the local area. In addition, each county / city
council has established a Business Support Unit (or put in place similar
arrangements) to act as a point of contact to ensure a quick, coordinated
response to businesses from local authorities in areas such as planning,
water and roads.
4.3 Local Government Finance and the Programme for Government
4.3.1 The Commission on Taxation that reported in 2009 set out a series of
proposals on annual local taxation, domestic water charges, and other
aspects of local government finance (see section 2.6 above).
4.3.2 The renewed Programme for Government agreed in October 2009 indicated
the Government’s intention to introduce a new local government financing
system, including a site valuation tax for non-agricultural land, covering both
residential and commercial properties. Unlike the property tax proposed by
the Commission on Taxation, however, such a tax would be based on the
site or land value, rather than the property or any construction built upon the
land.
4.3.3 In the Budgetary Statement for Budget 2010, the Minister for Finance,
stated that “considerable groundwork will need to be done before a Site
Valuation Tax can be introduced”, but signalled that work would begin
shortly on the registration of ownership and the valuation of land.
4.3.4 The 2009 Programme for Government also proposed that a charging
system for treated water be introduced which will be fair and easy to apply.
Under the proposals, households would be allocated a basic volume of
water free of charge, with charges applying for water use in excess of the
allowance, to incentivise conservation. However, the Programme for
43